The Barclay brothers, owners of The Ritz Hotel and The Daily Telegraph, have been building a stake in Intercontinental Hotels group, as Neil Hume suggested last week. They confirmed in a statement this morning that one of their investment vehicles, Ellerman Corporation, had accumulated a 5 per cent stake. IHG says it has met them but is not in any takeover talks. Our reporters will take a look today at what the brothers may be up to. We’ll also try to assess their record a bit – it isn’t easy because they’re very private – but not everything they do works out: just look at Monstermob. There is speculation on FT Alphaville that the Barclays might be working with Joe Lewis, David Rowland and/or the Reuben brothers. IHG shares are up 2½ per cent.
I expect we’ll do more today on McKinsey’s report for Mayor Bloomberg about New York’s position as a financial centre and the ground it is giving up to London. The report contains some great statistics and, especially for City dwellers, makes great reading. As Peter Thal Larsen wrote in Saturday’s paper, it is undoubtedly true that London is growing faster in many areas than New York as European companies and governments turn increasingly to its capital markets. But I think we need to be very careful to bear in mind that this report is part of a political project and is being used as a lever to extract lighter regulation in the US. Also, the report was put together quite fast.
We will do more, also, on the threatened strike from BA cabin crew. The airline has sought arbitration today from Acas. When I spoke to Willie Walsh on Jeff Randall’s Radio Five Live show last night he was at pains to say this would not disrupt his other plans such as pension reform, migration to Heathrow’s Terminal Five and company-wide pay talks. But it’s hard to share his optimism: with such thorny issues ahead of him, he does need to bring staff with him, yet he can’t afford to come across as a soft touch. BA shares fell nearly 1½ per cent this morning.
While I’m on the subject of Five Live, anybody who heard the programme last night will have heard Lawrence Hunt talking about his new airline, Silverjet, which on Thursday launches its first business class-only flight from Luton to Newark. Stand by for lots of PR puffery about the marvellous passenger experience. But investors should watch out: this company had to raise money on Aim last year because it got turned down by venture capitalists, even though they are awash with cash and short of opportunities. That is not a great sign. Hunt is dead keen for me to fly with him – he kept going on about it on air and again in the bar afterwards – but I’m afraid I don’t want to pay £1,000 to fly across the Atlantic and can’t accept freebies for very sound professional reasons. I’ll watch the share price instead.
Our other news includes IG Group, the UK spread-betting company, saying it is preparing for possible acquisitions in continental Europe to exploit the liberalisation of financial markets under the European Union’s Markets in Financial Instruments Directive (Mifid).
Wolseley warned this morning that it continued to be affected by the slowdown in the US housing market. It announced 4,000 job cuts but said it still expected to outperform the market for its current financial year.
Pearson expects to report full-year earnings towards the top of the range of analysts’ expectations, the owner of the Financial Times said this morning, as it reported strong year-end trading across all of its divisions.
Rumour of the Day: Neil Hume on our markets desk says there are rumours that Kazakhmys may buy the 25 per cent stake in Eurasian Natural Resources Corporation which is owned by Kazakhmys’s executive chairman, Vladimir Kim. Shares in Aegis are also being lifted on rumours of a bid from Publicis and shares in Resolution are rising on talk of a bid from AIG.